5-Star Stocks Poised to Pop: Innophos

Based on the aggregated intelligence of 140,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, phosphate producer Innophos Holdings (Nasdaq: IPHS  ) has earned a coveted five-star ranking.

With that in mind, let's take a closer look at Innophos' business and see what CAPS investors are saying about the stock right now.

Innophos facts

Headquarters (Founded)

Cranbury, N.J. (2004)

Market Cap

$414.1 million

Industry

Specialty chemicals

Trailing-12-Month Revenue

$865.8 million

Management

Chairman/CEO Randolph Gress

CFO Neil Salmon

Compound Annual Revenue Growth (Over Past 3 Years)

17.6%

Cash / Debt

$93.7 million / $246.0 million

Dividend Yield

3.5%

Competitors

PotashCorp (NYSE: POT  )

Agrium (NYSE: AGU  )

Mosaic (NYSE: MOS  )

CAPS Members Bullish on IPHS Also Bullish on

Johnson & Johnson (NYSE: JNJ  )

CAPS Members Bearish on IPHS Also Bearish on

AIG (NYSE: AIG  )

Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

On CAPS, 97% of the 760 members who have rated Innophos believe the stock will outperform the S&P 500 going forward. These bulls include Blakjak87 and All-Star brightsideLP, who is ranked in the top 2% of our community.

Just last month, Blakjak87 highlighted the stock as having all the essential nutrients to support market-beating gains:

Still trading at a decent [forward P/E] @ 10.6. Big player in a specialty market with a ~40% market share in North America. Phosphates produced through [Innophos'] subsidiary are used in anything from foods and beverages to water and metal treatment to detergents and fertilizers. Ample room for growth as economy expands.

In a pitch from one week later, brightsideLP also advises Fools to quickly get in on Innophos:

This company is relatively unknown and small enough to be avoided by the large funds. They work in a niche segment of the chemicals market and would be a strategic acquisition target for a larger company such as [Dow Chemical (NYSE: DOW  ) .] ... Upside is large for continued growth even in a depressed economic condition. The potential further deterioration of the US dollar (imo) will allow [Innophos] to offer their product in other areas outside the US. Debt has been greatly reduced in short order and should continue to be the top priority of management.

What do you think about Innophos, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. The CAPS community is waiting to hear your opinions. CAPS is 100% free, so get started!

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Innophos is a Motley Fool Hidden Gems pick, and the Fool owns shares of it. Johnson & Johnson is a choice of Income Investor. The Fool's disclosure policy always gets a perfect score.


Read/Post Comments (3) | Recommend This Article (12)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 08, 2009, at 4:53 PM, jmt587 wrote:

    I own it, and I like it. I agree with Brightside, if they can continue to reduce their debt, things could really look great for shareholders in the future.

  • Report this Comment On October 09, 2009, at 11:36 AM, greenwave3 wrote:

    IPHS is really undervalued right now with a significant margin of safety built into the price. Even assuming lower revenues, the stock is still trading at ridiculously low valuation levels. I own and am buying more at these levels.

  • Report this Comment On October 19, 2009, at 3:08 PM, LoneWolf888 wrote:

    Has been a profitable trade. Nice little company . However, the growing debt to cash ratio is not comforting. Since the company showed a lackluster second quarter with no positive guidance for the 3rd quarter, waiting until after the Nov 3rd announcement to possible get long again ..

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